Maren gave the internet banking details to Brendan, who set up term deposits in her name. He sent the bank messages from within her internet banking and signed off in her name. The bank called Maren several times to confirm instructions, and she said she was happy for Brendan to act on her behalf.

After having her accounts reviewed by an accountant eight years later, Maren realised Brendan had set up the term deposits and deposited his own funds in them to minimise his own tax obligations. As a non-resident, she paid less tax on funds held in her account. She complained to her bank that it had permitted Brendan to operate her accounts illegally and in breach of his obligation to act in her best interest.

Our investigation

We looked at whether there were any warning signs the bank should have noticed and concluded there were none because:

• It is not the bank’s role to determine whether a power of attorney is acting in someone’s best interest.
• The bank had a safeguard of not allowing those with a power of attorney to use internet banking, which Maren had circumvented by giving Brendan her banking details.
• The actions and messages from within Maren’s internet banking looked like they were from her, and there was no indication they were from someone else.
• The bank had contacted Maren directly on several occasions and she had confirmed Brendan could act for her.

Outcome

Maren’s accountant had charged her $940 to review the account statements, which the bank offered to reimburse. In light of our views, Maren agreed to accept the bank’s offer as full and final settlement of her complaint.